You have been hearing a lot about bitcoin and virtual currency off late, and the hype around it. So that's in it that has made it so hyped and worth $750.
Through the years we have been hearing people talking about virtual currency like paypal, alertpay, liberty reserve, solidtrustpay etc., which were just tokens or a form of currency which by itself did not have any value but when bought using fiat money (dollar / pound etc) had a equivalent of the fiat money. These were used by people to pay for digital goods or services (ebooks, pay for seo, traffic, and what not). With no geographical boundary around it, it reached its peak between 2000-2010 but soon due to people using it for criminal intent some of the virtual currency were forced to close down.
With the downfall of virtual currency came a new era of a more sophisticated type of currency known to be built on secure algorithms known as cryptography.
No one knows who is the creator except a name "Satoshi Nakamoto" who built "Bitcoin" which is been circulating all across. Till date no one has a clue of who is Satoshi Nakamoto and his/her whereabouts.
Now lets look at how this works...
Cryptocurrency is a form of digital asset which is created with every single transaction that takes place in a peer to peer network. Confused?.. Now let me explain you in detail. Traditional currency such as dollar is created by Central Banks based on demand for banknotes, GDP growth etc and the amount of currency to be circulated is administered and fully controlled by the Central Banks. Every transaction has to be via the banks and is recorded for debit or credit to account. Sounds familiar right? In Cryptocurrency world, small amount of money (coins) is created initially and circulated among the creators and its supporters. New digital wallets are created to hold and transact this currency and a peer to peer software application is used to "mine" (online ledger for verifying the transactions which in turn creates new money in the form of "transaction fee"). When someone from the group starts to transact, the peer to peer network records the transaction and deducts a fraction of the amount as transaction fee which is credited to the transaction recording peers. Thus the computers (peers) involved in recording transactions are the ones who create new coins and the process goes on until a predefined amount of coins are "mined".
Come back to learn more on how much coins are mined till date and how the reward (mining) works..
Through the years we have been hearing people talking about virtual currency like paypal, alertpay, liberty reserve, solidtrustpay etc., which were just tokens or a form of currency which by itself did not have any value but when bought using fiat money (dollar / pound etc) had a equivalent of the fiat money. These were used by people to pay for digital goods or services (ebooks, pay for seo, traffic, and what not). With no geographical boundary around it, it reached its peak between 2000-2010 but soon due to people using it for criminal intent some of the virtual currency were forced to close down.
With the downfall of virtual currency came a new era of a more sophisticated type of currency known to be built on secure algorithms known as cryptography.
No one knows who is the creator except a name "Satoshi Nakamoto" who built "Bitcoin" which is been circulating all across. Till date no one has a clue of who is Satoshi Nakamoto and his/her whereabouts.
Now lets look at how this works...
Cryptocurrency is a form of digital asset which is created with every single transaction that takes place in a peer to peer network. Confused?.. Now let me explain you in detail. Traditional currency such as dollar is created by Central Banks based on demand for banknotes, GDP growth etc and the amount of currency to be circulated is administered and fully controlled by the Central Banks. Every transaction has to be via the banks and is recorded for debit or credit to account. Sounds familiar right? In Cryptocurrency world, small amount of money (coins) is created initially and circulated among the creators and its supporters. New digital wallets are created to hold and transact this currency and a peer to peer software application is used to "mine" (online ledger for verifying the transactions which in turn creates new money in the form of "transaction fee"). When someone from the group starts to transact, the peer to peer network records the transaction and deducts a fraction of the amount as transaction fee which is credited to the transaction recording peers. Thus the computers (peers) involved in recording transactions are the ones who create new coins and the process goes on until a predefined amount of coins are "mined".
Come back to learn more on how much coins are mined till date and how the reward (mining) works..
